Miliband has hit a nerve, admits Hammond

Ed Miliband’s promise to freeze energy prices has “hit a nerve” with the
public and the Conservatives must respond with concrete policies of their
own, a cabinet minister has warned.

Philip Hammond at the Conservative Party Conference this weekPhoto: LEON NEAL/AFP

By Steven Swinford, Senior Political Correspondent

9:54PM BST 30 Sep 2013

Philip Hammond, the Defence Secretary, told a fringe meeting at the Conservative Party conference that the Tories need to “really address the challenge of domestic energy bills”.

He also expressed admiration for the way that Mr Miliband “very adroitly” moved from criticising the deficit reduction plan to saying that it will not benefit hard-working people.

His comments are in stark contrast to those of George Osborne, the Chancellor, who dismissed the Labour leader’s proposals as a “gimmick” that would force up energy prices. It reflects growing concern among Tory ministers and MPs about Mr Miliband’s resurgence after the Labour Party conference.

One Cabinet minister said of the Opposition leader’s pledge on energy: “Miliband has set a trap and we would be mad to walk into it by standing up for companies that people hate.” Another minister was even more direct: “It [his pledge on energy prices] was brilliant politics.”

Last week, Michael Gove, the Education Secretary, said that Mr Miliband has been “absolutely right” to identify rising energy bills as a problem. He suggested that claims by energy companies that a price cap could lead to blackouts should be taken with a “pinch of salt”.

Mr Hammond said today: “Miliband has hit a nerve with utility prices. The Chancellor gets this and he gets that we have to respond to that. The good news for us is that we’ve got a bit of time to do it, a bit of time [to] really address the challenge of domestic energy bills rather than having some spurious debate about the nature of capitalism and whether you can control economic actors.”

Referring to Labour’s change of attack on the economy, Mr Hammond added: “Nobody doubts that Plan A is working, and nobody doubts the competence of the Tory economic managers. Miliband has very adroitly, I have to acknowledge, shifted from arguing that Plan A won’t work to arguing that it will work, but it won’t do you any good. We’re absolutely up for this debate. We have to make the case that not only living standards will rise for ordinary hard-working people but that their wealth will be protected.

“I think the next 18 months will be used relentlessly by the Chancellor to ensure that we do address these issues and we win the second round of this economic argument.”

Mr Hammond said that the Conservatives do not have to be popular to win the next election, but must earn voters’ respect. “They don’t have to like us, and I don’t care if they don’t like us, so long as they respect us as competent and able to deliver what the country needs.

“As long as we can convince them that our clear commitment is to a recovery that benefits everyone.”